Shanghai (ZXZC)- Japanese automaker Honda will sell its stake in Honda Automobile (China) to GAC Honda, a joint venture with GAC group, valued at about RMB 602 million (around $94.7 million), according to Honda's statement released on May 17.

The stake to be transferred this time includes 55% from Honda and 10% from Honda Motor (China) Investment Co., Ltd.

The stake transfer, with the aim of enhancing the operational efficiency of Honda's auto businesses in China, will be conducted in August this year after receiving regulatory approval from China's government.

In the near future, GAC Honda is going to take over Honda Automobile (China)'s plant in Guangzhou, the capital of Guangdong Province, which will be upgraded and retooled to enlarge GAC Honda's production capacity.

Honda Automobile (China) was founded in 2003 by Honda (55%), Honda Motor (China) Investment Co., Ltd (10%), GAC Group (25%) and Dongfeng Motor Corporation (10%).

At the end of last year, GAC Group approved a deal to transfer its 25% stake in Honda Automobile (China) through the open market to GAC Honda. The minimum price for the stake transfer was around RMB 231.6 million. The group also announced that GAC Group will acquire 100% stake in Honda Automobile (China) through open market and agreements.

Then on January 2, 2018, Dongfeng Motor Corporation put its 10% stake in Honda Automobile (China) on the market for sale. Once GAC Honda completes the stake acquisition from the above four shareholders, Honda Automobile (China) will become the wholly-owned subsidiary of GAC Honda.

According to relevant data, GAC Group delivered a total of 730,600 vehicles last year (excluding the deliveries of Acura). It could be expected that GAC Honda's annual production capacity will be elevated from the current 60,000 units after the completion of the stake acquisition and plant upgrading.